How SAP Cloud ERP enabled Western Sugar’s move to AI-driven automation

Presented by SAPTen years ago, Western Sugar made a decision that would prove prescient: move from on-premise SAP ECC to SAP S/4HANA Cloud Public Edition. At the time, artificial intelligence wasn't a priority on most roadmaps. The company was simply trying to escape what Director of Corporate Controlling, Richard Caluori, calls "a trainwreck:” a heavily customized ERP system so laden with custom ABAP code that it had become unupgradable.Today, that early cloud adoption is proving to be the foundation for Western Sugar's AI transformation. As SAP accelerates its rollout of business AI capabilities across finance, supply chain, HR, and more, Western Sugar finds itself uniquely positioned to take advantage of the technology."We didn't move to the cloud thinking about AI," Caluori says. "But that decision to embrace clean core principles and standardized processes turned out to be exactly what we needed when AI capabilities became available. The clean data, the standardized workflows, the disciplined processes, all of that groundwork we laid for basic operational reasons is now the foundation that makes AI work. We were ready without even knowing it."Building AI readiness with a clean core ERP foundationWestern Sugar's journey began with a familiar enterprise problem: technical debt. Years of on-premise customization had created a system that was nearly impossible to maintain or upgrade. "Because we were on premise, we could do our own coding in ABAP, and over the years we created such a mess with our internal coding that the software was no longer upgradable," Caluori explains. "The immediate benefits of moving to public cloud were clear: reduced infrastructure burden and access to standard processes refined by SAP. They've been in this business for 40 to 50 years, and they put all their experience into this one solution. Now upgrades just work."But the most significant advantage proved to be the clean core philosophy inherent in public cloud deployments, which means the software is maintained and upgraded by SAP. This approach, combined with robust API connectivity, created an environment where Western Sugar's IT department could easily integrate systems. In SAP S/4HANA Cloud Public Edition, this model keeps core ERP logic standardized and upgradeable, while extensions and integrations are handled through SAP-supported APIs and services."In the end, we have lower total cost of ownership, a better product, and the data quality and process discipline that's essential for AI adoption," Caluori says.This clean core foundation — standardized, continuously updated, and API-connected — is what makes embedded AI viable inside SAP Cloud ERP.How clean core processes in SAP enabled AI automationWhen SAP began rolling out SAP Business AI capabilities inside SAP S/4HANA Cloud Public Edition, Caluori was amped to improve processes through automation and standardization in ways they'd never previously imagined. The company's first major AI implementation focused on central invoice management. Today, invoices arrive from external sources and pass through the firewall. If they meet predefined AI confidence thresholds, SAP Business AI automatically posts them with zero human keyboard input. Each transaction is continuously evaluated using a traffic-light model: green items are processed automatically, yellow items are routed for review, and red items are flagged for immediate attention."Because the invoice just flows through the system automatically, we're held to a high standard," he says. "The AI-driven functionality only works if the whole process chain, from purchasing requisition to purchase order to receiving to issuing is clean, so we're constantly improving those upstream processes to meet the demands of our AI innovations."Quantifying the operational impact of AI automationCaluori estimates Western Sugar has achieved six-figure direct cost savings through AI automation, not accounting for improved visibility and control. "When I log into my computer now, I can see immediately in real time what's going on across the procurement side," he says. "I have a comprehensive cockpit view that I didn't have before. Because I have much more visibility, I have much more control over operations."The company is now expanding AI adoption into new areas. With Western Sugar's recent transition to SAP's three-speed landscape, Caluori is targeting month-end closing processes for AI automation. "My goal is that AI handles the vast majority of the month-end close," he says. "Over time, as AI learns what we're doing and how we close the books, the goal is to automate over 50 percent of the month's end closing activities. We're also looking forward to AI-managed procurement networks, and proactive reporting and intelligence, all of which will soon be possible."Western Sugar is also developing predictive maintenance AI for its manufacturing equipment — a critical capability for its large-scale facilities, where equipment failures can halt production and lead to losses in the hundreds of thousands of dollars. These efforts build on SAP’s AI and analytics capabilities across asset management and manufacturing systems."We've started an internal team working on predictive analytics with AI, where the system can tell us in advance if we need to be on alert for specific equipment — that a particular machine could break down in the next two or three days or weeks," Caluori explains. "If we can proactively address these issues before they cause production stoppages, this will save us millions of dollars."Managing organizational change alongside AI adoptionWhile the technology itself has delivered clear benefits, the organizational impact has been more complex. For Western Sugar, modernizing its core systems early — by moving to SAP’s cloud and embracing standardized, upgrade-driven processes — required not just new workflows, but a fundamental shift in how employees thought about change itself.For Caluori, that readiness is non-negotiable. “Change management is the number-one key to success,” he says. “We had to do a lot of change management, not only around business processes, but around employee behavior as well.”That work paid off over time, in part because cloud adoption normalized continuous change. As upgrades became routine rather than disruptive, employees grew more comfortable with evolution as an operating condition.“Now, when SAP comes with a new upgrade, they know change is coming,” Caluori explains. “The mindset has shifted to being eager to see what improvements the next update will bring.” And that cultural shift has proven critical as Western Sugar moves beyond system upgrades and into more advanced initiatives.“Now people are even eager to move into AI — the bigger projects,” he adds. However, that cultural readiness must be driven from the top. At Western Sugar, executive leadership — many of whom came from large international organizations — understands the competitive necessity of staying current with technology. That top-down commitment has helped normalize continuous change and created the foundation required to pursue AI strategically.Lessons in AI readiness from Western SugarFor companies considering their own AI journeys, Western Sugar's experience offers a clear lesson: AI readiness begins long before AI adoption. The clean core, standardized processes, and strong data quality that Western Sugar established a decade ago, driven purely by the need to escape technical debt, proved to be exactly what AI required. And while Caluori acknowledges the advantage an early start gave them, he says the second-best time to start is now."You have to embrace these changes, otherwise you're left behind," Caluori says. "That continuous improvement is what SAP provides us, and now with AI capabilities integrated throughout, we're seeing benefits we couldn't have imagined when we started this journey."Sponsored articles are content produced by a company that is either paying for the post or has a business relationship with VentureBeat, and they’re always clearly marked. For more information, contact sales@venturebeat.com.Weiter zum vollständigen Artikel bei VentureBeat Weiter zum vollständigen Artikel bei VentureBeat